Buying a new leasehold house

[pussinwellyboots]

We are in the process of part exchanging for a 4 bed detached new build persimmon home.

We are very wary of the leasehold part of it (999 years). It is the right house in the right location at a good price but information on the difference between leasehold and freehold houses seems quite limited for new builds and the only reason I can see for Persimmon selling it as such is that they make money by selling on the freehold.

Does anyone know whether we have an automatic right to buy the freehold after 2 years or will persimmon try to avoid this by wrapping up the lease In a company and selling it on?

Any other experiences of leasehold properties with Persimmion?

[Spickle]

Have a read of this article:

www.thisismoney.co.uk/money/mortgageshome/article-3088134/The-great-divide-Buy-165-000-house-left-road-outright-buy-one-right-don-t.html

Hope it helps!

[MrsBertMacklin]

They will sell the freehold interest in the estate to a ground rent acquisition investor.

Is there a Residents Management Company named in your lease (or TP1 agreement)?

Have you checked what ground rent is payable and how this increases over the years?

[JoJoSM2]

Have you also considered the cost of buying a freehold in a couple of years' time? Provided it's actually possible, you'll need to cough up thousands on the freehold + pay for legals... Is the house you're buying good value for money once you've factored that in? + the stress of having to go though it + and ground rent and service charge in the meantime?

[H1ghw4y61Revisited]

I wouldn't worry about being leasehold for 999years, a lease is preferred by developers because they can ask you to agree to a bunch of covenants or conditions such as not putting flags on the house, not building without permission, not using the house as a business premise. If you are genuinely concerned you can buy out your ground rent so you have the freehold title(although the covenants will survive unless you buy them out also). even if the freehold is sold on, the land wouldn't revert to the freeholder until the end of your leasehold term. What's your concern re the leasehold?

[namechangedtoday15]

Most new builds are leasehold and depending where you are in the country lots of older properties are leasehold (we've owned 3 houses - including our current 1930s house - and they've all been leasehold). Why are you concerned? Your solicitor should have explained all the implications to you.

[lalalonglegs]

Patrick Collison wrote about this in the Guardian yesterday (can't link). He seemed to think that in New developments especially, they were unfair and exploitative. Beware the rising ground rent clauses.

[Spickle]

www.theguardian.com/money/blog/2016/oct/22/leasehold-property-ground-rent-no-ethical-basis

[sohackedoff]

Leasehold allows landlord to enforce positive as well as negative covenants. Have owned leasehold houses myself. Not a problem.

[pussinwellyboots]

Thank you so much for your answers, I was away from the computer for a few hours! I will read and discuss with dh - there's some useful info that we hadn't come across.

[Fairybust]

What is the ground rent your'e being charged? If it's £1 a year then its.more than likely they will shift the freehold to the management company which you should be members of. If it is more then they will look to.sell.it on.

You should get right of first refusal but it can be very expensive etc.

Is it a mixed development of flats and houses? If so.it can be easier to have all.one tenure

[MumOfTwoMasterOfNone]

Already been pointed out. Around us there is a very large development, some of which is suffering from astronomical rises in ground rent now
Our estate is half and half but I am freehold. I looked at a house that was leasehold and it did put me off, so that's something else to consider when you sell it on.